The Evolution of the Arbitrum Ecosystem: From Full-Stack DeFi to Institutional Preferred Platform

In recent years, Arbitrum has continuously expanded its ecosystem while entering a unique exploration phase. This evolution redefines the boundaries of cryptocurrency adoption, from the DeFi native stage, to gradual participation by institutions, and then to the preliminary emergence of the financial system's prototype.

Arbitrum has entered the mature stage of the ecosystem, forming a comprehensive market segmentation layout in the Decentralized Finance field. Currently, it has achieved several key milestones:

• Spot DEX: Accumulated trading volume in the Layer 2 network is the highest, reaching $534.2 billion
• Perpetual Contracts: Total trading volume reached $802 billion, setting a new historical high.
• Lending Services: Liquidity depth exceeds $1.2 billion, enhancing productivity scale through credit.
• RWA-Fi: Increased to a historical peak of $262.5 million, covering 20 assets

The self-sustainable growth of Arbitrum is reflected in three aspects: strong user growth, deep liquidity, and continuous activity in various business lines.

In the third quarter of 2021, during the early stage of the virtual automated market maker (vAMM) dominated by GMX and Gains Network, Arbitrum laid the foundational pattern for perpetual contract DEX. Today, user growth has entered a stable and mature phase, with high user retention clearly evidenced in the daily trading volume trend:

• Since the third quarter of 2023, the daily trading volume has achieved approximately a 3-fold increase (from 1 billion USD to 4 billion USD)
• Cumulative trading volume reached 802.5 billion USD

Since then, the perpetual DEX ecosystem has achieved diversified development, with professional participants continuously emerging:

• Rho Protocol: Develop native cryptocurrency interest rate derivatives
• Aark Digital: Provides ultra-high leverage trading (leverage up to 1000 times)
• Ostium: Covers a diversified asset allocation (including foreign exchange, stock indices, and commodities)

The ecosystem demonstrates a trend of high user engagement and product innovation running in parallel, proving its sustainability through self-sustaining and dynamic evolution.

As of the third quarter of 2024, Arbitrum's RWA-Fi sector has seen its total locked value (TVL) accelerate to a historic peak of $262.7 million. The support from a diverse and growing global pool of fund participants further solidifies Arbitrum's position in the enterprise-grade tokenized Decentralized Finance space. Notably, $EUTBL issued by Spiko Finance has taken a leading position in the EU government bond tokenization market, with a market share of approximately 32%, surpassing other competitors.

With institutional giants leading the trend, the diversity of the Arbitrum sub-ecosystem is also growing, spanning RWA integration and Decentralized Finance native innovations. This integration meets various needs:

• Institutional allocators seeking compliant revenue-generating assets (such as government bonds, credit bond markets)
• Crypto-native users pursuing permissionless leverage, structured products, or long-tail yield strategies.

Arbitrum is becoming a comprehensive ecosystem that attracts capital from various fields, from Decentralized Finance to traditional finance. Arbitrum's Orbit and Stylus have become the core engines for multi-domain growth, providing the capability to build dedicated chains for cross-industry vertical scenarios.

Currently, the adoption rate of the Arbitrum technology framework is rapidly increasing:

• 83 official ecosystem partners
• 41 mainnet launches (up 32% since April 2024)
• 21 testnets, 21 in development
• The total locked value (TVL) of the Arbitrum ecosystem (excluding ArbitrumOne) exceeds $320 million.

Arbitrum is gaining increasing favor among large institutions, a trend supported by the dual validation of actual application demands and infrastructure layers. Globally renowned funds are building RWA-Fi liquidity, while some infrastructure projects are bridging real-world capital onto the chain.

The ultimate issuance network of traditional finance has begun to take shape: Converge is building an institutional-grade settlement layer, while Rayls Labs has launched a compliance chain suitable for the banking system.

The surge in MEV phenomena marks the ecosystem's move towards the next stage of mature development. Arbitrum's Timeboost auction mechanism introduces an efficient and fair competitive model, perfectly replicating the proposer-builder separation (PBS) model of the mainnet. Since its launch less than two months ago, the usage rate has been quite high, bringing substantial revenue to the DAO.

The Timeboost fast track currently accounts for about 5% of the total transaction volume on Arbitrum and is maintaining a steady upward trend. Approximately $175 million in daily trading volume comes from MEV arbitrage, accounting for 21.8% of Arbitrum's average daily transaction volume over the past month. This indicates that MEV has become the core engine driving substantial trading volume.

In the InfoFi application space, Arbitrum has gained attention through the Yapper leaderboard integrated with Kaito. The project comes with a 3-month incentive of 400,000 $ARB tokens. An innovative form of Layer 2 InfoFi is taking shape, with Yapyo positioning itself as a decentralized consensus hub that merges social collaboration and incentive design.

Overall, Arbitrum has crossed a critical point and is moving from Decentralized Finance to a new stage of broader on-chain applications. Its maturity depth and evolutionary dynamics are clearly visible, proving that Arbitrum is taking a unique development path.